A number of economists have noted that Denmark is faring worse economically during the crisis than Norway, Sweden and Finland, in part because its restrictions have been tighter, financial media Finans reports.
“We (Denmark) are the ones who have got by the worst in the Nordic region. That is now very clear. But we have also had the hardest lockdown,” Helge Pedersen, senior economist with bank Nordea, told Finans.
Denmark’s GDP increased by 0.6 percent in the fourth quarter of 2020, giving an overall reduction to the economy of 3.7 percent last year compared to 2019, according to preliminary figures from Statistics Denmark.
That is a bigger hit to the economy than those suffered in any of the other three Nordic countries on the European mainland, Finans writes, noting that in Norway and Finland GDP expressed as prices decreased by 1.5 percent in 2020 (the figures for the latter country are preliminary), while for Sweden, that number was 2.5 percent. The calculations are attributed to the bank Handelsbanken.
All four countries have spent significantly on compensation and furlough packages, but Denmark was the only country to pump money directly into its economy.
This was done through allowing wage earners in the country to claim so-called ‘holiday money’ funds ahead of schedule. The Danish state footed the bill for the claims.
That increased consumer spending in October and November, which served to avoid an even worse Danish slump, Finans reports.
“We got through the year without massive unemployment and waves of bankruptcies in Denmark. That is good in a broader perspective. But neither did that happen in other Scandinavian countries. On the other hand, the lockdown has hit the Danish economy a little harder,” Handelsbanken’s senior economist Jes Asmussen told the media.
Sweden is well-known for having taken a softer approach to societal shutdowns and restrictions throughout the pandemic, only recently changing tack towards stricter measures.
Norway’s restrictions have been similarly stringent to those in Denmark but have generally had a shorter duration and a more regional focus.
The Danish economy is likely to continue to feel a relatively high economic impact into 2021. Projections by the two banks suggest that the first quarter of 2021 will see a 2 percent shrinkage in Denmark’s GDP, larger than that in Sweden. Norway and Finland’s economies are forecast to grow slightly.